But his special adviser Alexander Downer said after the leaders met last week in Nicosia that differences remained.

He refused to discuss the differences, but the two sides reportedly have not agreed on key issues including what to do with private property lost during the war, territorial boundaries, details of a federal government and elections.

Cyprus was split into a Greek Cypriot south and a Turkish Cypriot north in 1974 when Turkey invaded after a coup by supporters with Greece. The island joined the European Union in 2004, but only the internationally-recognised south enjoys membership benefits.

Numerous UN-mediated attempts at reunification have failed, but Mr Ban has been pressing both sides to reach a deal.

Mr Downer said Cypriot president Dimitris Christofias and Turkish Cypriot leader Dervis Eroglu had made progress on several core issues since July 7 "and that's encouraging. But, there are still difficulties to be resolved on the core issues".

Mr Downer will join Mr Ban at talks with the two leaders at the secluded Greentree estate in Manhasset, New York.

The secretary general "wants to hear about what those difficulties are, and to hear from the leaders the sorts of ideas they have for overcoming those difficulties", Mr Downer said.